Financial News

  • 28 February 2014, 11:08

Americans Swoop On City Broking Firm Oriel

The US-based owner of the investment bank Keefe, Bruyette & Woods (KBW) is in talks to add to its presence in the City through a takeover of the broking firm Oriel Securities.

Sky News understands that Stifel Financial Corp is in advanced talks about acquiring Oriel, which has been engaged in on-off discussions about mergers for some time.

The deal between the two parties is not yet done and could still fall apart, according to a person close to the discussions.

Stifel, which is listed on the New York Stock Exchange, recently reported a net profit of $52.1mon record net turnover of $562.5m for the three months ended December 31.

Based in Missouri, it has been on an acquisition spree in recent years, spending well over 1bn on at least 25 purchases since Ron Kruszewski became chief executive officer in 1997.

Its biggest existing operation in London is understood to be at KBW, which it bought in 2013.

Oriel is owned by its management and employees, led by the chief executive Simon Bragg. It lost its last chief executive a year ago when David Knox stepped down amid "strategic differences" with other managers.

Mr Bragg, who holds a big chunk of the firm's shares, took over from Mr Knox, who is now understood to be planning to establish a new broker.

Oriel has around 100 employees and boasted last April that it had raised more than 1bn for clients during the first quarter of the year, although it has shed staff during earlier rounds of cost-cutting.

Like other brokers, Oriel was hit hard by the weak trading environment since the financial crisis, but witnessed a recovery in its performance during the last year, advising on deals such as the flotation of Conviviality Retail, owner of the Bargain Booze off-licence chain.

In September, it secured a loan from the Canadian bank CIBC, that could be converted into a minority stake.

The financial terms of Stifel's proposed takeover of Oriel, including the loan from CIBC, were unclear on Thursday.

Mr Bragg told the Financial Times last autumn that speculation about its financial health was misguided.

"There's been a bit of chit-chat about us. People have been talking about us for quite some time, about how we might be in a difficult position in terms of finance, which is not true," he said.

Oriel declined to comment while Stifel could not be reached for comment.

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